Cabinet approves stake sale in three power companies

New Delhi: The Cabinet Committee on Economic Affairs (CCEA) has again started the disinvestment process and approved the initial public offer (IPO) of fresh shares in three public sector power utilities along with sale of five to 10 per cent Government existing equity.

The three companies are Rural Electric Corporation (REC), Power Grid Corporation of India (PGCIL) and National Hydroelectric Power Corporation (NHPC). The Government hopes to collect a total of about Rs4,381 crore through the exercise, said the Finance Minister, P Chidambaram.

The IPOs are likely to hit the market during the first quarter of fiscal 2007-08 and PGCIL is likely to appoint the lead managers for its public issue by next week.

Chidambaram said the Left parties were consulted before taking the decisions.

He said the issue of 10 per cent fresh shares of REC is estimated to garner around Rs420 crore, 10 per cent fresh issue in PGCIL could mop up Rs971 crore and 10 per cent fresh share offering by NHPC could bring in another Rs1,490 crore taking the total amount received through issue of fresh shares to approximately Rs2,881 crore.